The government has increased the maximum price it is ready to guarantee companies generating electricity of new wind farms.
This occurs while ministers try to meet difficult promises to lower household invoices and create an electrical network that it is almost entirely free from fossil fuels by 2030.
The Department for Energy Security and Net Zero published the details before the last auction for the government -supported contracts.
The auction opens in August and will be one of the last which will be able to deliver projects in time to reach the objective of the government of government power by 2030.
The conservatives have described the new offshore wind prices as “lightening the eyes”.
The government said the prices did not represent the final guaranteed amount, because companies will make lower offers to win contracts.
A spokesperson for the Energy Secretary, Ed Miliband, said that “the auction will reveal the actual price, just as he did last year, where the auction has collapsed at considerably lower prices”.
Each year, companies wishing to build renewable energy projects bid for government -supported contracts.
The government agrees to pay them a fixed price for the electricity they produce for a defined period, now up to 20 years, and up to a maximum price known as administrative driving price, or ASP.
Companies have devoted offers lower than the ASP to win project contracts, then the government sets a new guaranteed price, known as compensation prices, based on them.
If electricity market prices are higher than the prices set, companies reimburse the excess of energy suppliers, with an expectation, it should lower invoices for consumers.
If prices fall below the guaranteed price, energy suppliers – and customers – paid the difference to businesses.
This year, the maximum price guaranteed for the offshore wind will be £ 113 per megawatt hour, against £ 102 in 2024.
The offshore floating wind, which is more recent technology, is more expensive at £ 271 / MWh, against £ 245.
Onshore Wind experienced a lower increase from £ 89 / MWh to £ 92 while the price of solar energy fell to £ 75 / MWh at £ 85 / MWh.
The conservative secretary of ghost energy, Claire Coutinho, said: “These are attractive prices – the highest in a decade and well above the average cost of electricity last year. And it is before the hidden costs of the network, storage and wasted wind that all end up on our energy bills”
She said that Ed Miliband put “a zero zero zero above the economy or the cost of living”.
The government argues that the transition to renewable energies will protect consumers from volatile gas prices and reduce the invoices “for good”.
Johnny Gowdy, from the Regen non -profit group, who advises the transition to Net Zero, said the ASP was to “set the starting point for the auction; with competitive offers, we would expect the acting price of real auction to be much lower”
“There is also a compromise between volume and price. If the prices of offers are high, the government will buy less capacity. If the price is low, the government will be able to buy more capacity.”
He says that the cost of the production of offshore wind “has probably increased in the past two years”, but he adds “we will have to wait and see the result of the auction” to know how much.
Previous auctions led to a lower compensation price as much as possible.
There is a risk of fixing the maximum price too low.
In 2023, under the Conservatives, no offshore wind developer offered projects because they said they were not viable at the price offered.
The government has made changes to the system in the hope of attracting more offers to create competition.
For the first time this year, offshore wind projects that do not yet have a building permit to be able to request a contract.
The contract durations have also been extended for wind and solar projects from 15 years to 20 and the Energy Secretary will be able to see the developer’s offers before fixing the final final budget.
A spokesperson for Desnz said that his system reforms “would allow a competitive auction that guarantees the best possible price for consumers while obtaining the clean energy we need to get us out of the roller coaster” fossil fuel “.
